well there's 2 things you need to think about, do you want to secure your wallet or your whole pc/mac/linux system?

securing your wallet, use the password lock at least (doh), better still stick your wallet on a usb drive (even one of those password protected devices) so there's no wallet on your machine at all until you mount the usb drive. keep backups on a 2nd usb drive as well.

i would never use cloud backups but if you think it's ok, encrypt the wallet, stuff it in an encrypted rar file as well (paranoid? put #1 encrypted rar inside a 2nd rar). and then use more than 1 cloud.

securing your system - truecrypt whole system encryption (windoze only) is the best way to go.or there's a way of doing it for freebsd systems as well (via geli, google it).linux i dunno, i only used *bsd.

if you're in the paranoid security department, put your whole encrypted OS on a usb drive so there's no bitcoin software on your main machine. keep a backup of course in case the usb flash runs out of write cycles.

My friend gave me 5BTC on a USB, and walked me through the process of installing wallet software and importing the wallet to the compter. If I delete everything associated with bitcoin on the computer and only keep the USB, does that count as a cold offline storage wallet? As far as I know, it is the only copy of the wallet in existance.

Also, if I drop the USB into a lake when fishing, is it lost forever, or can I have a backup using some passcode in a website or is there a customer help line or something?

My friend gave me 5BTC on a USB, and walked me through the process of installing wallet software and importing the wallet to the compter. If I delete everything associated with bitcoin on the computer and only keep the USB, does that count as a cold offline storage wallet? As far as I know, it is the only copy of the wallet in existance.

Some good info here... I'm doing a clean install of Linux Mint on a laptop loaded with Armory and the main QT client... backing up to Wuala and a USB stick. The backups are in a truecrypt volume. Hoping this will be safe enough, with also the ability to send/ receive coins if need be.

Must also think of a way of letting my family know how to access it should I die!